Dealing With A Bankruptcy Due To Coronavirus (COVID-19)

Coronavirus (COVID-19) has had a massive toll on both the lives and livelihood of many people nationally and globally. As of this writing, the state of New York and mainly New York City has been hit particularly hard when examining the figures of those who are infected. The financial ramifications of COVID-19 will leave an unfortunate and lasting effect for many individuals and businesses throughout the world. However, instant financial relief from debt is available, and we can help you file a Chapter 7 (Individual or Business), Chapter 11 (Business), and Chapter 13 (Payment Plan) bankruptcy due to the coronavirus outbreak.

Chapter 7 Individual Bankruptcy

 The impact of the coronavirus (COVID-19) is leaving many New Yorkers without a job. Job loss or a reduction in hours results in inability to pay bills on time. Medical bills may be piling up if you are ill with the virus, need to get tested or have a common cold or flu. An ambulance ride alone can cost a minimum of $700! (you’re better off ordering Uber). It’s even likely that many are taking out personal loans to stay afloat. If the culmination of all these events put you at the tipping point and you simply cannot keep up anymore – there is a solution.  With a Chapter 7 Individual Bankruptcy, you can eliminate unsecured debts (credit cards, medical bills, and auto loans and personal loans). Under some circumstances, IRS and State tax debt may be dischargeable. In most cases, you can keep your car and home after filing for bankruptcy.

A quick consultation over the phone can answer whether you meet the eligibility requirements for filing a personal bankruptcy. We can be reached at (646) 736-6328.

There are a number of benefits when filing a Chapter 7 Bankruptcy including:

• Ending wage garnishment;
• Stopping creditors from harassing you;
• Halting collection efforts on a co-signed debt;
• Eliminating repossession debt;
• Automatically ending lawsuits associated with your debt;
• Starting the process to rebuild your credit.

A Chapter 7 bankruptcy can be life changing.  We have had many clients that have exhausted themselves and their resources defending against lawsuits, wage garnishments and continuous non-stop phone calls from creditors. They have come to us with tens of thousands, sometimes hundreds of thousands, in debt, and have walked away in a four-month span, with no unsecured debt. Those that have went bankrupt, are now rebuilding their credit and qualifying for credit cards and auto loans.

Chapter 11 Business Bankruptcy

Not only are individuals being affected by the coronavirus, but businesses as well. Whether you operate a small vintage clothing store or a large regional corporation, Chapter 11 may be your solution. Since New York State has placed nonessential businesses out of commission for the time being, a financial slowdown is imminent. Even essential businesses are seeing significantly declined foot traffic due to the fears impacting the city and the implementation of social distancing.

The following types of business entities qualify for a Chapter 11 Bankruptcy filing due to COVID-19: Limited Liability Company (LLC), S-Corporation, C-Corporations, Partnership, and PLLC. If you decide to move forward with bankruptcy, your business will undergo a reorganization of all or most debts.

The main objective of Chapter 11 is to keep operations going without shutting down. The goal is to repay your debts in one lump sum or over a certain time period, and retain assets so that you may remain in business. Ideally, you would be allowed to keep making a profit while slowly paying off the business debt through a repayment plan. The following are key points and benefits of a Chapter 11 Business Bankruptcy:

• Your business regardless of it’s structure can still operate;
• You may qualify for a payment plan or a lump sum to clear out your organizations’ debt;
• The amount you have to pay back may be less than the actual liability that is owed;
• You can continue turning a profit during the entire process and stay open.

Chapter 13 Bankruptcy 

For those that are unable to qualify for a Chapter 7 bankruptcy, because of above median income status or homeownership with equity over $150,000, Chapter 13 bankruptcy may be a viable option.

Imagine a situation where you are behind on your car payment, rent/mortgage, and credit cards. In addition to that, many of the vendors you deal with are also waiting on a payment from you. Keeping up with these various lenders and vendors can get difficult. You know that you can eventually pay them all but will need a sizeable cushion of time because of the impact that COVID-19 has had on this city. By filing a Chapter 13 Bankruptcy, you consolidate all of your debts into one single monthly principal amount to be repaid within three to five years. During this time, creditors are not forbidden to attempt to collect a debt outside of the payment plan arrangement ordered by the Bankruptcy Court.

Chapter 13 Bankruptcy, most importantly, can save your home from foreclosure.  Filing this bankruptcy stops a public foreclosure auction instantly, so long as the filing takes place before the home is sold. The home can be your personal residence or an investment property. Taking this road can help you retain your equity and catch up on the mortgage arrears accumulated over the years.

Contact Us

The current climate in New York City right has never happened before because of the coronavirus (COVID-19). We are living in unprecedented times. The federal government has extended social distancing policies through April 30, 2020. This is the earliest date that things can get back to normal. However, as many of us understand, this concept of normal and ordinary will take a considerable amount of time.

By filing a Chapter 7, 11, or 13 Bankruptcy, you are giving yourself the chance to keep your head above water. Whether you are an individual or a business, we may be able to help you. We service clients in Manhattan, Brooklyn, Queens, Staten Island, Bronx, Westchester, and Long Island. Call us today at (646) 736-6328 so we can hear about your matter and offer some options.